After many years of dedication and hard work, your software company is now receiving emails and calls about potential acquisitions. Although you may not have considered an exit strategy or even thought about it, it is always a good idea to be ready for a sale. There’s always a buyer waiting to offer you a chance to sell your company, team, or customers.
We believe that you should consider these five aspects of your jonas software before you even think about selling it.
1. Properly Assessing Your Jonas Software Valuability
Be sure to understand the true value of your software company before you start discussing valuation. Open your books and become an expert in your numbers. This includes revenue, recurring revenue, employee retention, forecasts, and P&L forecasts. You should also research your industry to find out where your company ranks and how much market share you have compared to others. Listen to what buyers are looking for in a software company and keep your ears open.
2. Knowing Your Software Company’s Strengths & Weaknesses, and Identifying the Most Important Things for the Acquirer
Your software company will be sought after by different buyers. To be able to clearly articulate the benefits or challenges of your construction software company to potential buyers, it is important that you first understand its strengths and weaknesses. You could generate revenue, grow the customer base, have the best products or expand into new markets. Once you have identified the key factors that make up their business, it is possible to begin “selling” your software company to potential buyers. This will help you align your goals and mission.
3. Find the perfect home for your business with your values and objectives in mind
Before you meet with potential acquirers, you should know what type of home you desire for your software company. Also, identify the reasons they are interested in buying your company. It is important to find an acquirer that will care about your employees, customers, and share your vision for the product. Many acquirers want to cut costs and see a quick return on their investment by cutting staff. Jonas Software will honor your legacy by taking care of your staff and customers post-acquisition. We want to make sure your clients and team can sleep at night knowing you have found a long-term home.
4. Know Your Acquisition Cycle
You should prepare for an actual acquisition cycle before you begin to consider selling your software company. Talk to your peers and competition to learn about the process and what resources you can rely on. Also, familiarize yourself with all stages of acquisitions. Keep in mind that timing is everything, even if you’re waiting to sell for a better valuation. Each company’s timing will be different. It is difficult to predict the future, especially in the fast-moving software industry. Consider, for example, if your company is at its maximum capacity and can benefit from additional resources to expand, or if the company is in distress and requires capital and guidance to rebuild and recover.
The acquisition process can move as fast or slow as you wish. Jonas Software’s dedicated Mergers & Acquisitions team works at the seller’s pace and is available to assist at every stage of the acquisition process. The average process takes 8 weeks from when the parties agree to a letter of intention.
5. Exit Strategy
Consider what you will do after the acquisition. Although it can be difficult to decide what to do next, it is essential to give your thoughts and to find the right buyer to help you achieve your goals. You may be able to continue managing the business as you are, or you might want to take on a new role outside Jonas.
What’s Next?
Owners often have limited time and resources, so it can be difficult to conduct the necessary research both internally and externally in order to arrive at an accurate valuation of your company. Jonas Software can assist you with this. We can start with a high-level discussion with our M&A staff who can answer all your questions. We can help you get started by helping you to think about the best direction for your sale, either in the immediate future or later on when it is most advantageous.
